Grace Burkert v. THE EQUITABLE LIFE ASSURANCE SOCIETY OF AMERICA v. JACOB JAMISON, A minor, by

PRECEDENTIAL
Filed April 25, 2002
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 01-1846
GRACE BURKERT
v.
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF AMERICA
v.
JACOB JAMISON, A minor, by and
through his natural parent
and guardian Cosima Jamison
Third-Party Defendant
Grace Burkert and Jacob
Jamison, a minor, by and
through his parent and
guardian Cosima Jamison,
Appellants
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
(D.C. No. 99-cv-00001)
District Judge: The Honorable Jan E. DuBois
Argued January 23, 2002
BEFORE: NYGAARD and STAPLETON, Circuit Judges ,
and CAPUTO,* District Judge.
_________________________________________________________________
* Honorable A. Richard Caputo, District Judge for the United States
District Court for the Middle District of Pennsylvania, sitting by
designation.
(Filed April 25, 2002)
Robert G. Bauer, Esq. (ARGUED)
Abraham, Bauer & Spalding
1600 Market Street
32nd Floor
Philadelphia, PA 19103
Counsel for Appellants
Daniel J. Zucker, Esq. (ARGUED)
Suite 1200

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260 South Broad Street
Philadelphia, PA 19102
Counsel for Appellee
OPINION OF THE COURT
NYGAARD, Circuit Judge.
Appellee, The Equitable Life Assurance Society of
America, canceled a $1 million dollar insurance policy on
the life of Seth Jamison because he lied about his drug and
alcohol use and treatment in his application. These
misrepresentations were discovered in a routine
investigation after Seth Jamison died as a result of an
overdose of heroin and cocaine. Appellants, Grace Burkert
and Jacob Jamison, argue that the critical items of
evidence--treatment records of Decedent’s marriage
counselor and another psychologist--are inadmissible and
should not have been considered by the District Court in
granting summary judgment for the insurer. In support of
their argument, Appellants attempt to invoke Decedent’s
psychotherapeutic privilege. The District Court held that
Appellants do not have standing to assert the
psychotherapeutic privilege because they are neither the
patient nor the personal representative of the patient. It
then declared the policy void ab initio and granted
summary judgment in favor of the insurers.2 Because the
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2. As alternate holdings, the District Court also found that Decedent and
the Decedent’s executors waived the privilege. Since we affirm on the
standing issue, we do not reach these alternate holdings here.
2
Supreme Court of Pennsylvania has not decided this
precise issue, we must predict how they will when
confronted with it. 2-J Corp. v. Tice, 126 F.3d 539, 541 (3d
Cir. 1997); Kiewit Eastern Co. v. L & R Cons. Co., Inc., 44
F.3d 1194, 1201 n.16 (3d Cir. 1995). We predict that it
would decide the issue precisely as the District Court did,
so we will affirm.
I. Standing
Appellants argue that to determine standing, we must
identify which party has a "legally sufficient interest." Pa.
Game Comm’n v. Dep. of Envtl. Res., 555 A.2d 812, 815 (Pa.
1989) (standing inquiry is to ascertain that a petitioner has
a "legally sufficient" interest to qualify that person as a
proper party to make a challenge). Appellants argue that
since the beneficiaries can release the insurance company
from its obligation to pay the proceeds of the policy, they
are the real parties in interest with respect to the policy.
This right, they contend, vests them with standing to
represent Decedent’s interests in an action to collect on his
life insurance policy. The question of who has the right to
enforce or waive the privilege, Appellants conclude, is
answered simply by determining who has an interest in

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carrying out the intention of the Decedent. Appellants are
wrong.
Without Pennsylvania Supreme Court precedent to
inform it, and because the rationale for the
psychotherapeutic privilege is the same as for the attorney-
client privilege, the District Court turned to attorney-client
privilege cases for guidance.3 Here, the District Court
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3. Decedent’s treatment records are privileged under 42 Pa. C.S.A.
S 5944 which provides:
No psychiatrist or person who has been licensed . . . to practice
psychology shall be, without the written consent of his client,
examined in any civil or criminal matter as to any information
acquired in the course of his professional services in behalf of such
client. The confidential relations and communications between a
psychologist or psychiatrist and his client shall be on the same
basis as those provided or prescribed by law between an attorney
and client.
3
discovered that "Pennsylvania courts have held that only
the client has standing to assert the privilege."
Commonwealth v. Trolene, 397 A.2d 1200, 1204-05 (Pa.
Super. Ct. 1979) (holding in a conspiracy case, where a
defendant tried to invoke a co-conspirator’s attorney-client
privilege, that the privilege is not a rule of competency and
that no one other than the client had standing to assert it);
Commonwealth v. McKenna, 213 A.2d 223, 226 (Pa. Super.
Ct. 1965) (defendant in a blackmail trial could not invoke
the privilege of his acquaintance because it belonged to the
acquaintance); Estate of Dowie, 19 A. 936, 937 (Pa. 1890)
("It is the privilege of the client to object, and not of a
stranger, even if the testimony objected to was a privileged
communication.").
We agree with the District Court. The Trolene court held
that a non-client may not assert the attorney-client
privilege regardless of any interest he may have in the
outcome of the litigation:
As to the claim based on the attorney-client privilege
between Lam and Brown, appellant has no standing to
invoke it. Commonwealth v. McKenna, 206 Pa.Super.
317, 322, 213 A.2d 223, 226 (1965); 8 Wigmore,
Evidence at 2321 (1961). Appellant claims that the
privilege is by statute . . . a rule of competency,
allowing anyone to invoke it, but cites for us no cases
so construing the statute. In fact, the case of Estate of
Dowie, 135 Pa. 210, 19 A. 936 (1890) holds exactly the
opposite.
397 A.2d at 1204.4
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This privilege applies to the communications themselves and records of

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those communications, and the privilege survives the death of the
patient. Com. v. Counterman, 719 A.2d 284, 294 (Pa. 1998) (application
of the privilege); Cohen v. Jenkintown Cab Co. , 357 A.2d 689, 692 (Pa.
Commw. Ct. 1976) (privilege survives death). These records were created
in the course of treatment of the Decedent and thus fall under the
privilege.
4. We acknowledge that this case is unique because the "client" is
deceased and the privilege survives the client’s death. Cohen, 357 A.2d
4
In an estate situation, the Pennsylvania Supreme Court
held that a non-client had no standing to assert the
attorney-client privilege. Specifically, the issue in Estate of
Dowie, 19 A. 936 (Pa. 1890), was whether the decedent,
John Dowie, promised during his lifetime to sell petitioner,
McNulty, a hotel. At the trial, the Orphan’s Court Judge,
overruling the attorney-client objection of petitioner,
permitted decedent’s executor attorney to testify as to the
conversations with his deceased client. In affirming the
ruling of the lower court, the Pennsylvania Supreme Court
ruled:
The auditor cannot be convicted of error in admitting
the testimony of Harry Hall, Esquire, as to
conversations had with Mrs. Dowie, his client. McNulty
cannot object to the reception of this evidence, even if
the testimony was of a confidential character. Hall was
not the attorney of McNulty, and it was not in his
power to object. It is the privilege of the client to object,
and not of a stranger, even if the testimony objected to
was a privileged communication.
Id. at 937.
Appellant, Grace Burkert, is not the Executrix of
Decedent’s estate, nor is she the Decedent’s spouse, nor
does she legally represent the Decedent in any capacity --
she is merely a policy beneficiary. Neither is Appellant or
Decedent’s minor son, Jacob Jamison, the "client" of the
therapist,5 nor the legal representative of Decedent. We
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at 692. Thus, for the privilege to survive, it logically follows that someone
must be able to assert the privilege after a client’s death. However, we
limit our inquiry to the third-party beneficiaries in this case and leave
the question of who can rightfully assert the privilege to the
Pennsylvania courts or legislature, and another day.
5. Explicit in the psychotherapist-patient relationship is the requirement
that the party seeking to invoke the privilege is the "client of the
psychotherapist." Although not defined in the statute, a "client" has been
characterized, as "an individual who employs a professional to provide
advice and assistance." M.M.D. v. State Board of Medicine, 725 A.2d
1266, 1268 (Pa. Commw. Ct. 1999); Fellowship v. Mission Inc. v. Lehigh
County, 690 A.2d 1271, 1275 n.4 (Pa. Commw. Ct. 1997).
5

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have found no case that would lead us to predict that
Pennsylvania courts would extend standing in this situation
to third party beneficiaries of an insurance policy, who after
all, may well be total strangers -- personally and legally --
to the policy holder/decedent. Because the District Court
properly admitted the treatment records, we now review its
declaration that the policy is void ab initio .
II. Questions Regarding Drug Use in Decedent’s Insurance
Application
Under Pennsylvania law, a life insurance policy is void ab
initio where the applicant’s representations are: 1) false; 2)
made fraudulently or otherwise made in bad faith; and 3)
material to the risk assumed. Matinchek v. John Alden Life
Ins. Co., 93 F.3d 96, 102 (3d Cir. 1996) (citations omitted).
Appellants argue that, under a summary judgment
standard, questions of fact exist with respect to each
element.
A. Falsity
The District Court concluded that "[i]t is clear from the
evidence that decedent answered question six falsely in at
least two respects: (1) there is substantial evidence that
decedent failed to disclose his continued use of illegal
controlled substances beyond 1990; and (2) decedent failed
to disclose significant addiction treatment by Dr. Forest,
including prescriptions for Antabuse and Prozac."6
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6. The District Court based this holding on the following evidence: Dr.
Spector individually counseled Decedent on seventeen occasions,
fourteen of which were prior to when he signed the Application;
Decedent informed Dr. Spector that he was using cocaine more than six
times a year; Dr. Spector recommended that Decedent get drug
counseling almost every week; Decedent was under the care of Dr.
Forrest, an addiction specialist, from January 1992 to January 1995;
Decedent had regular, repeated visits with Dr. Forrest from January
1992 to July 1994 and the counseling included abstinence from alcohol,
cocaine, food and smoking; Dr. Forest prescribed Antabuse, a drug that
causes illness if a person drinks when taking it; Dr. Forest prescribed
Prozac in increasing dosage from December 1994 through January 1995.
6
Question 6(a) asks whether the proposed insured has
used narcotics and other drugs within the last ten years;
question 6(b) asks whether the proposed insured has
received medical counseling or medical treatment regarding
the use of alcohol or drugs. The application stated that
Decedent’s answers are "true and complete to the best of
my knowledge and belief." The answers were expressly
made part of the application, and the application required
the answers to be "complete". In his answer to question six,
Decedent described his drug and alcohol use and treatment
as follows: "late 80s-1990--occasional use of cocaine--in

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patient treatment at Institute of Penna for 28 days no
problems since."
Appellants argue that the "no problems since" response
does not necessarily mean no drug use. Instead, Appellants
argue, the response means that Jamison may have used
cocaine since, but not to an extent that it was a"problem"
requiring treatment. Even under a summary judgment
standard, Appellants’ argument fails. Uncontradicted
documentary evidence (records of Ann Rosen Spector,
Ph.D., and Jean Forrest, M.D.), and their uncontradicted
deposition testimony unequivocally prove that Decedent
continued to habitually use cocaine, received treatment and
counseling for drugs and alcohol, and received
prescriptions of Antabuse and Prozac for his alcoholism in
the relevant time period. Thus, Decedent’s answers to
Questions 6(a) and 6(b) on Part 2 of the Application were
patently false. There is likewise no question that Decedent
knew his answers were false. At the time of the Application,
he was still using cocaine and undergoing treatment with
Ann Rosen Spector, Ph.D. for alcohol and drug use.
B. Decedent’s Statements Were Made in Bad Faith
The District Court concluded that statements made in
Decedent’s insurance application, based on Decedent’s false
representations as to his drug abuse and counseling, were
made in bad faith. The District Court correctly noted that
courts applying Pennsylvania law have routinely held that
misrepresentations regarding alcohol abuse are deemed to
be made in bad faith as a matter of law and extended this
holding to include misrepresentations regarding drug use.
7
See, e.g., Van Riper v. The Equitable Life Assurance Soc’y of
the United States, 561 F.Supp. 26, aff ’d without opinion,
707 F.2d 1397 (3d Cir. 1983); 6 Couch on Insurance
S 88:20 (3d ed. & Supp. 2000). We agree that to equate
alcohol abuse to drug abuse is both reasonable and logical.
Appellants argue that most cases supporting the
inference of bad faith result from an untruthful"no" answer
to a "yes or no" question. Here, Appellants allege, that
Jamison’s answers were truthful, and argue that it is a
question of fact as to whether the "incomplete" answers can
be deemed bad faith. It is not, however, a question of fact,
because we have specifically held that "[f]raud is presumed
. . . from knowledge of the falsity." Coolspring Stone Supply,
Inc. v. Am. States Life Ins. Co., 10 F.3d 144, 148 (3d Cir.
1993); Evans v. Penn Mut. Life Ins. Co., 186 A. 133, 138
(Pa. 1936) (inference of fraud is irresistible when, for
example, unreported illness or disability of the insured was
so serious and so recent that he could not have forgotten
it); Grimes v. Prudential Ins. Co., 585 A.2d 29, 31 (Pa.
Super. Ct. 1991). Given that the drug use and
treatment/counseling for drug and alcohol use were
substantial, and proximate in time (even ongoing) when
Decedent completed his application, Appellants’ so-called

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"ambiguity" argument is frivolous, and we affirm the
District Court’s conclusion of bad faith.
C. Decedent’s Misrepresentations Were Material to the
Risk Assumed
"A misrepresented fact is material if being disclosed to
the insurer it would have caused it to refuse the risk
altogether or to demand a higher premium." New York Life
v. Johnson, 923 F.2d 279, 281 (3d Cir. 1991) (citing
McCaffrey v. Knights & Ladies of Columbia, 63 A. 189 (Pa.
1906)); see also Piccinini v. Teachers Protective Mut. Life
Insurance Co., 463 A.2d 1017, 1024 n.2 (Pa. Super. Ct.
1983) (citations omitted). " ‘Every fact is material which
increases the risk, or which, if disclosed, would have a fair
reason for demanding a higher premium.’ " New York Life,
923 F.2d at 282 (citing Hartman v. Keystone Ins. Co., 21
Pa. 466, 477 (1853)). Courts have repeatedly held that false
answers relating to the insured’s treatment for alcoholism
8
and alcohol use are material as a matter of law. Van Riper,
561 F.Supp. at 31; 6 Couch on Ins. S 88:6 (3d ed. 1996)
(listing cases).
Appellants argue that there is still a question of fact as
to the extent of the influence Jamison’s misrepresentation
had on the underwriting decision to provide Jamison with
life insurance. Appellants argue that the insurers knew of
Jamison’s past drug and alcohol problem and took the
possibility of Jamison’s relapse into its calculation of the
risks of providing him with insurance. Thus, Appellants
argue, Jamison was a "calculated risk" and the formula of
calculation (e.g., how the equation would have changed if
the insurance company knew of Jamison’s true history) is
a question of fact, which trumps the District Court’s
materiality conclusion as a matter of law.
Appellants’ argument fails. The evidence and level of
misrepresentation are undisputed by other evidence of
record, and they clearly support the District Court’s
conclusion that "knowledge of the true nature of decedent’s
drug and alcohol use would have caused Equitable to
decline the risk or require higher premiums."
III. Conclusion
In sum, the District Court properly considered the
treatment records and correctly concluded that the life
insurance policy was void ab initio. Accordingly, we will
affirm.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit

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